Financial crisis starts to damage India and China

The two Asian powerhouse economies, India and China are being hit by the global financial crisis.

India cut its main short-term lending rate and China says it's preparing for a slowdown in it's economy.

A senior Bank of China executive in Shanghai, says the impact of the crisis on China started to appear with a sharp slowdown in industrial profit growth and fiscal income.

He says the global economy will likely enter recession next year and will have a huge impact on China

In India the central bank cut its main lending rate for the second time in as many weeks to ease a cash squeeze and spur economic growth.

Analysts say the surprise move shows concern that strains on the economy are quickly becoming more severe.